Tune Protect Group Berhad (“Company”) is accelerating its diversification plan across products, partners and channels, and will be focusing on more lifestyle and on-demand solutions that address the new needs of consumers in the wake of the COVID-19 pandemic. The Company will also be seeking additional partnerships in ASEAN, particularly in Vietnam and Indonesia, as well as the Middle East to ease the impact of the pandemic on the general insurance and reinsurance business. The Company’s overall revenue has been affected, especially in the travel protection business with the closure of international borders and airlines temporarily hibernating their fleet.
Pandemic Impact and Recovery
The COVID-19 pandemic has affected almost every country around the world and disrupted the global economy, with the travel sector being one of the hardest hit. Various economic reports projected global Gross Domestic Product (GDP) to be between -5.2% to -4.9% and the Malaysian economy to be between -3.8% to +0.5% for 2020.
However, as the pandemic moves into its recovery phase and domestic travel begins taking flight, the Company has rolled out differentiated products including COVID-19 coverage in Malaysia and Thailand as well as in several business-to-business (B2B) markets within the Middle East.
Speaking at the Company’s 9th Annual General Meeting (“AGM”), How Kim Lian (“How”), Group Chief Financial Officer said, “Whilst we observed the impact of COVID-19 pandemic on our Travel business in the second quarter 2020 (“2Q2020”), we have also at the same time observed the rise of new opportunities within the Travel segment where certain governments, airports and airlines have mandated travel and/or health insurance post-COVID-19.”
Responding to the pandemic
With a focus on ASEAN and the Middle East, the Company, along with its subsidiaries and Overseas Ventures (collectively known as the “Group”) seek to diversify its geographical reach, product offerings and delivery channels to better tap into the new opportunities arising from the pandemic.
Several countries – the United Arab Emirates and Oman – have responded quickly to the pandemic by taking the lead to make travel and/or health insurance mandatory for all inbound passengers. The Group is following up closely on this new development while actively engaging with preferred partners to evaluate these new opportunities.
The Group is also working on diversifying its channels and platforms to reach more customers and to take advantage of the shift in offline to online consumer spending behaviour. Currently, the Group has already established affinity and digital partnerships that leverage digital platforms such as community application, e-commerce, loyalty management and e-wallet. In 2019, the Company secured strategic partnerships in Malaysia, Thailand, Vietnam and Indonesia.
Recently, the Company enhanced Pay-As-You-Drive (PAYD), an opt-in feature to the company’s motor insurance that rewards customers with rebates up to 20% of their insurance premium for driving less to benefit a wider vehicle owners’ segment as many would have embraced the working-from-home lifestyle.
Soon, the Company will be launching its mobile application with buy and claims functions to provide consumers with the Company’s online products through their mobile devices anytime, anywhere. In addition to a revamped Direct-to-Consumer (D2C) website that focuses on consumer experience, customers can now look forward to a refreshed user interface, simpler customer registration, easy browsing, buying and claims submissions, and more through thismobile application.
Outlook for 2020
The Group experienced lower revenue in the travel segment during 2Q 2020 as air travel contracted sharply. However, the Group has seen a partial recovery in May and June 2020, thanks to the reopening of domestic travel. With the gradual reopening of international borders anticipated in the second half of 2020, the Group expects a recovery in its Travel business.
The Malaysian general insurance and takaful sector is expected to be stable in 2020 underpinned by robust capitalisation to cushion any volatility of the financial markets, and consumers are expected to continue prioritising personal, health and wellness protection. In the non-travel segments, the Group experienced minimal impact from the pandemic with a moderate improvement in claims ratio in 2Q2020. The Group looks forward to seeing positive results from its diversification efforts to integrate into various partnership platforms in the second half of this year.
How said, “While the pandemic has caused uncertainties to the global economy, we remain cautiously optimistic that Tune Protect is well positioned to weather this through leaning on our strong capital position and digital capabilities. Moreover, we expect to achieve a moderate recovery in our travel segment in the second half of 2020.”
Healthy Capital Position
The Group recorded a 10.6% decline in its Gross Written Premiums (GWP) and a 9.7% increase in Profit After Tax (PAT) for the financial year ended December 2019. For the 1H2020, the Group announced profit after tax (PAT) of RM21.5 million, representing a 32.1% decrease due to the challenges of the COVID-19 pandemic, but partly mitigated by the recovery initiatives. Operating revenue decreased from RM251.1 million to RM223.3 million due to lower premiums recorded.
“Despite a challenging period, we would like to impress that our capital remains adequate and our fundamentals are intact. The priority now is for us to conserve cash to ensure the Company’s operational sustainability, and any excess in funds will be invested in strengthening our digital capabilities and realise our diversification plan,” How concluded.
In its Corporate Sustainability efforts, the Company strives to create sustainable value for its shareholders, employees, customers, agents and the community at large in line with SDG 8: Decent Work & Economic Growth.
At the Company’s 9th AGM, all nine resolutions have been passed by shareholders.
For more information about Tune Protect and to view the Company’s 2019 Annual Report, please visit the official website at https://www.tuneprotect.com.